The maverick bank that taught the world about inflation
In short: In the 1960s, the St. Louis Fed became a rebel within the Federal Reserve System. By championing a controversial theory on the relationship between money growth and inflation, its economists fundamentally shifted how the nation understands monetary policy—a legacy that remains a cornerstone of modern economics.
The Federal Reserve Bank of St. Louis, headquartered in downtown St. Louis at 411 Locust Street, serves as the primary economic hub for the Eighth District. This region covers Arkansas and large portions of Illinois, Indiana, Kentucky, Mississippi, Missouri, and West Tennessee. While it performs essential functions like cash handling, currency inspection, and supervising state-member banks, its most enduring intellectual contribution stems from its research division.
During the 1960s, the bank garnered a reputation as a 'maverick' for its vocal support of monetarism. Economists at the institution released pioneering studies proving a straight correlation between inflation and money supply expansion, under the guidance of research director Homer Jones and bank president Darryl Francis. This shift was significant enough that monetarist theories were eventually adopted widely across the broader economic landscape.
Beyond theory, the St. Louis Fed is a powerhouse of data. It maintains the Federal Reserve Economic Data (FRED) database, which contains hundreds of thousands of time series ranging from GDP and employment to interest rates. These resources are accessed millions of times annually by researchers and the public alike. The bank also balances high-level research with community development, providing resources for affordable housing, neighborhood revitalization, and financial literacy for underbanked populations.
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Sources
- Summary by Intellect · source: Federal Reserve Bank of St. Louis
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